Having made multi-million dollar investments in private high-technology companies, Philippine-based venture management and advisory group Narra Venture Capital is now more fixated on enabling business growth.
In an interaction with DEALSTREETASIA, Narra’s managing partner Paco Sandejas said that aside from helping companies succeed, they were looking to invest in startups and ideas related to financial technology (fintech), education tech (edtech), and healthtech.
Narra was established in 2002 and works with Silicon Valley-based partners like Tallwood Venture Capital. The Manila-based VC firm has invested in companies developing semiconductors and semiconductor-related products, converged communication systems, computing platforms, and software & related services in Silicon Valley and similar technology centers.
Narra manages two venture capital funds, and has an established group of founding Limited Partners led by Dado Banatao, managing partner of Tallwood, and listed Philippine conglomerate Ayala Corporation. The same investors were joined by First Philippine Holdings Inc and the Lhuillier Group for Narra Fund II, which was formed in March 2007.
Narra’s recent activities were smaller investments on promising Internet startups. Edited Excerpts
What are the latest funding and investment updates from Narra Venture?
We did a deal with Flyspaces in January. The big one we’re working on right now is Xepto Computing, a cloud-based e-learning project. It is commercializing technologies that we are working on with some engineers at DOST (Department of Science and Technology). Xepto was contracted to help the project called Cloud Top within DOST. It was completed in September 2014 but DOST wants it to go commercial and DepEd (Department of Education) wants to use some of these elements. Xepto is very experienced in this field, that’s why we were engaged. So we’re helping DepEd now and hopefully we’ll see some big announcements soon. Xepto is into differentiated hardware and systems integration.
What type of startup or idea is Narra scouting for?
Mostly technology. We’re trying to be in companies that you can defend yourself from your competitors through some advantage. It’s normally defended by innovation, intellectual property, invention. In Xepto we invented a few innovative ways to have the schools, students and the teachers learn and teach better. And then for FlySpaces we’re helping real estate people manage their co-working spaces. We are in various areas that you can put infrastructure in place for people to be more efficient.
Does Narra plan to raise a new fund?
We haven’t raised a new fund. What we’re doing now is focusing on less new projects and that doesn’t make sense for more funds. We’re focusing more on raising capital for the companies as they come and less of them. Historically, our average investment size is $2.5 million investments. The biggest one we did was $6 million. We invested in the Philippines, US, and in India.
How much is Narra willing to invest in startups?
In the past we did anywhere from $250,000 to $2 million. Lately we’ve been focusing on a few investments, namely right now Stratpoint Technologies (software services), Xepto, FlySpaces, and in the US we have Unique Solutions (Me-Ality brand), Zippia and others. Narra is proud to invest in the founder of Movoto.com, now part of Recruit Group of Japan. It’s a lot of work and we’re focusing on those investments. We need to make them successful.
What do you think are the problems in the country that need technology solutions?
Narra Ventures is focusing on the big problems like financial services, educational services, and health services for the common Filipino. We don’t have enough people doing this and we think there’s a lot of room for many companies to disrupt in these areas. I’m also on the board of Unionbank and there I see many efforts and opportunities to disrupt the traditional financial services sector. So there’s fintech, edtech, and healthtech. Then there’s Internet-of-Things which is really more of a platform that can be used for all of these. There are so many things that could be done.
How do you find the startup climate in the Philippines?
It is very hot now. In fact, I had a hard time in keeping up with all the deals being thrown at us and there is actually a big need for angels and, especially later-stage investors because there so much activity in the angel round and we’re actually now challenged. I think, it’s very hot in the early stage and we need to get hotter in the Series A, and B, and so I would like to invite all the rich people here who can create the funds to support new companies that are doing good things.
Some angel investors say people with money here are reluctant in investing in startups. What do you think should be done to convince them?
I think everyone has to study more. Take for example the people who own the traditional businesses. They have to learn more about new technologies. And maybe, be hungry to learn and spend time with innovators. And the innovators have to spend time to educate the would-be investors.
What do you think about crowdfunding?
There are some challenges about regulations. For example, in the US they are starting to regulate it who can invest. But I like it. I want to encourage people to do crowdfunding.